8th May 2008 07:01
Grafton Group PLC08 May 2008 Grafton Group plc Interim Management Statement Grafton Group plc, the builders merchants and DIY Group with operations in theUK and Ireland, issues the following Interim Management Statement, for the fourmonths ended 30 April 2008, in advance of the Company's Annual General Meetingto be held at 10.30am today in the IMI Conference Centre, Sandyford Road, Dublin16. In the UK, the residential repair, maintenance and improvement market hasdemonstrated resilience despite lower investment and spending on housing due totightening in the availability of finance secured on property. The Group's UKMerchanting business experienced positive trading conditions in the firstquarter with low single digit growth in like for like sales. Market conditionsweakened in April compared to strong growth in April 2007 and like for like UKsales fell. Overall UK sales increased by ten per cent in sterling in the fourmonths. Ongoing development of the UK Merchanting business continued with thecompletion of five acquisitions trading from eleven branches with an annualturnover of approximately €40 million and the opening of eleven branches. In Ireland the reduction in new residential construction which started in thesecond half of 2007 gathered pace as housing output adjusts to a moresustainable level. The sharp fall in housing starts and completions has, asexpected, led to a more difficult trading environment for the Irish Merchantingbusiness. The Irish RMI market appears to be holding up well andnon-residential construction remains strong. Growth in consumer spending in Ireland moderated from the high rates of recentyears despite generally favourable income and employment conditions. Turnoverin the Irish Retailing business was lower due to the more subdued retailenvironment and the absence of the very favourable weather that stimulatedexceptionally strong demand in March and April 2007. The new store inCarrick-on-Shannon which opened in March traded ahead of expectations. Group turnover in the four months to 30 April declined by eight per cent to €944million and reflects the adverse translation impact of a twelve per cent declinein sterling against the euro. Irish sales fell by sixteen per cent. Groupprofit before tax was, as expected, significantly down compared to the verystrong performance in the first four months of 2007. Growth in the UK economy is expected to moderate and the RMI market is likely tobecome more challenging as the year develops. Contributions from acquisitionsand scale related sourcing and cost synergies should help limit the impact onprofit of market weakness. In Ireland low growth in the economy is forecast duelargely to the downturn in the residential construction market and slowdown inthe international economy. A programme to achieve scale related synergies andbring costs more into line with lower volumes without compromising the marketpositions and medium term prospects of the Group's businesses is ongoing. TheGroup's strong financial position and cash flow leave it well placed to copewith these more challenging markets. 8 May 2008 For further information please contact: Grafton Group plc + 353 1 216 0600 Murray Consultants + 353 1 498 0300Michael Chadwick, Executive Chairman Joe MurrayColm O Nuallain, Finance Director Citigate Dewe Rogerson + 44 207282 2945 Ginny Pulbrook A copy of this Statement is also available on our website www.graftonplc.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Grafton Group